Derefaka: FG Leveraging Gas as Alternative Fuel for Nigerians

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Mr. Justice Derefaka who is the Program Manager for both the Nigeria Gas Flare Commercialisation Program and the Autogas, part of the National Gas Expansion Project, in this interview says the federal government is working hard to enthrone gas as the go-to fuel for transportation, electricity, cooking and other uses which could support Nigeria’s domestic economy. Chineme Okafor brings the excerpts:

What was the basis of the recent performance appraisal meeting the Minister of State for Petroleum Resources, Timipre Sylva held with agencies and personnel under his watch?
Governments are purposive organisations; they have strategies, visions, missions, goals, and objectives. These aspirations need to be translated into deliverables such as services and jobs. Hence, governments, like business, are engaged in the production of goods and services by combining primary factors of production; being, land, labour and capital. Also, you need to know and see that performance evaluation of Ministries, Departments and agencies (MDAs) is one of the key focus of the present administration. This is predicated on the fact that evaluating performance and results helps to understand better why some policies work and others do not. By producing and promoting evidence, policy evaluation supports the quality of decision-making, providing tailored advice to improve policy formulation and implementation.

As you may know a robust policy evaluation and its strategic use throughout the policy cycle can foster a range of governance objectives such as policies, value for money, and accountability and overall transparency of the policy-making process. More generally, it can minimise the risk of policy failure. So, for us in the ministry of petroleum resources, the rationale behind the ministerial mandate performance scorecard review session was primarily carried out to measure government’s results and the performance of the resources required to achieve them, to promote evidence-informed policymaking and to support budgetary governance.

Was it necessary when parastatals and personnel frequently report to the minister?
Don’t forget, robust policy-evaluation systems imply that evaluations are part and parcel of the policy cycle; which is that ministerial mandate performance scorecard review session are carried out rigorously and systematically, that the results are used by decisions-makers, and that information is readily available to the public. Moreover, it is important that we do this as mechanisms for policy evaluation are considered during the policy-formulation and design phase and integrated into the overall approach, and that the agreed approach includes mechanisms to ensure that all relevant information and data needed for effective policy evaluation can be collected during the implementation phase.

In a nutshell, the review is the structured and objective assessment of the present, future, ongoing or completed policy or reform initiative. The aim is to determine, inter alia, the relevance and fulfilment of objectives along with the initiative’s efficiency, effectiveness, impact and sustainability. Contrary to policy monitoring which is essentially a descriptive exercise.

So, what did you do there?
What we did at the review; we clearly sought to analyse linkages between policy interventions and effects. It strives to create deeper understanding of observed policy success or failure. For us at the ministry, this not only supports better decision-making; it specifically promotes learning, as it helps to understand why and how a policy was or has the potential to be successful or not. The review requires deep exploration and explanation, in order to identify, and provide responses to challenges and barriers affecting sound governance and policymaking. It is of particular interest to us willing to produce and use evidence to enhance decision-making. Plus, accountability, as it provides citizens and other stakeholders with information whether the efforts carried out by the ministry, including allocated financial resources, are producing the expected results.

The government seems keen on promoting gas, it now has the NGEP added to the NGFCP which you are its program manager, what about this new venture?
National Gas Expansion Programme (NGEP) is a programme put in place by the Honorable Minister of State for Petroleum Resources in furtherance of the domestic gas expansion programme of the current administration. It is designed to reinforce and expand domestic gas supply and stimulate demand in the country through the effective and efficient mobilisation and utilisation of all available assets, resources and infrastructure in the country.

Some of the terms of reference of the NGEP are to establish a comprehensive data bank of all gas relevant assets, infrastructure and facilities both public and private in the country, identify the volumes of un-committed gas in-country and their locations (public and private) which could be used towards achieving the objectives of the programme, recommend policy and legislative instruments that will aid in the deepening of in-country production of all gas accessories across the country. And, the deliverables of the programme include, development of a strong domestic gas-based economy by leveraging on the nation’s abundant gas potentials, promotion of gas as replacement fuel which will also save the nation the much-needed forex expended on imported fuels and provide alternatives to PMS, AGO and DPK for Nigerians.

The NGEP offers a unique opportunity in unlocking all gas molecules as a favourable combination of solution to a mirage of issues in the country ranging from energy poverty being a stark reality for millions of Nigerians every day, how carbon intensive energy usage is damaging our environment and potentially changing our climate, how our cities are becoming unbearable due to outdoor pollution.

Isn’t this similar to what the NGFCP is expected to do?
No, the framework objectives of the NGEP include to ensure that infrastructure is in place to allow continuous availability of LPG (Liquefied Petroleum Gas); make LPG affordable to both urban and rural users, position LPG as an alternative for the eventual replacement of firewood and kerosene as domestic cooking fuel, reduce deforestation in Northern Nigeria, curb desertification, reduce health risks and other environmental issues, as well as ensure safety of use.

Are there measurable impacts that your secretariat expects from the NGEP?
In terms of impact, the NGEP will create over 12 million direct and indirect jobs and human capacity development nationwide hence the minister declaring it the flagship program of the ministry at the review session.
Some of the key programmes of the NGEP will include Autogas development for automobiles and other prime movers, domestic LPG penetration, Gas Based Industries (GBI) revitalization, in-country gas accessories manufacturing and ease of doing business in the gas sector.

And, how far gone are you in accomplishing these?
The committee has identified Autogas development as a key deliverable of the NGEP. Consequently, plans have reached advanced stage in line with ministerial directive and support for the development of LPG, CNG and LNG co-location in NNPC owned and operated mega stations in the 36 states and Abuja.

Under this arrangement retail outlets will offer a full complement of gas products as transportation fuels in addition to existing white products as cheaper cleaner and more environmentally friendly alternatives. The NNPC and mega retail outlets owners and equipment providers are fully onboard in this objective and measures are in place to achieve a roll out of this programme by end of September 2020 using select NNPC owned outlets as pilots.

The committee is also engaging large fleet owners, Nigerian Governors Forum, ALGON, conversion companies and dispensing facility owners to collaborate in the conversion and establishment of refueling facilities nationwide leveraging on already existing pipelines and mother stations with a view to easing the cost burden of conversion which is a major impediment to auto gas development.

In order to bridge the gas facility deficit, companies engaged in virtual gas movement have been mobilised as well to ensure the development of a virtual gas grid that can serve the emerging domestic gas market. Several of these companies have expressed ability and preparedness to meet the October 1 roll out timeline.

It is also worthy of note that the committee initiated the draft of a dual fuel engine importation and domestic manufacturing policy with the objective of pushing through the endorsement of government as an executive order with effect from January 2021. This will compel all engine imported or manufactured domestically to comply with the dual fuel requirement as it is done in many other countries that have made significant progress in Autogas utilisation. This will imply that all engine imports or manufactured domestically must comply.
In the days ahead building up to the roll out, parastatals under the ministry of petroleum resources will be presenting designated vehicles for dual fuel conversion.

How about domestic LPG penetration, this could be impact Nigerians better?
Yes, the committee is taking measures to expand domestic LPG availability through the engagement of NLNG for additional 250,000MT currently exported for the domestic market, promotion of development of additional production platforms in the Delta-Edo axis by the NPDC/SEPLAT/ASTAYAVIYAK. The NPDC Oredo production platform is expected to come on board by October 2020.

The resuscitation of the Warri refinery LPG production facility and 7 kilometres pipeline; the GMD of the NNPC has given funding assurance on this project. The additional volumes will ensure uninterrupted supply of LPG based on anticipated increase following our demand trigger initiatives.

A major demand trigger initiative is the establishment of Micro Distribution Centres (MDC) for LPG across the country to bridge the supply and accessories gap between the market and consumers. Efforts are also at advanced stage to ensure that some MDCs are in place for the October 1 roll out. The NGEP committee is focused on extending the MDC pilot scheme currently existing in some barracks in Abuja to all military and paramilitary barracks nationwide. Efforts are ongoing to engage the managers of the Chevron Escravos gas to secure commitment of some LPG volumes for the domestic market.

Would you clarify the NGEP’s plans for Gas Based Industries (GBI) revitalisation?
Yes, the committee is committed to the development of Nigerian gas-based industries from textile manufacturing to production of polymer resins and so extensive engagements were undertaken with the manufacturers association and Nigeria Labour Congress (NLC) to sensitize on this initiative. It is worthy of note that the polymer resins produced by Indorama is to serve as raw material for RUNGAS prime, the first LPG cylinder production facility with 400,000 units per annum composite cylinder manufacturing capacity at Polaku Bayelsa state. The plant is currently under construction in partnership with NCDMB, after a groundbreaking ceremony by the minister some days back.

The committee’s central objective here is the creation of the enabling environment for gas-based industries to thrive through the easing of availability restrictions and its attendant cost implications. Also engaging our attention is the removal of investment bottlenecks. These have combined over the years to stifle investments in the sector.

The committee has kickstarted a public awareness campaign on the ministerial initiative and programmes through a series of coordinated press releases and media spotlights which will be accentuated as the Programme progresses building up to the roll out.

The roll out is planned to be a media focus launch of series of programmes and commissioning ceremonies commencing on 1st October 2020 and spread throughout the first and second week of October. Nigeria, with significantly larger gas reserves, has the potential to achieve even bigger success compared to Trinidad and Tobago.

The world is gradually turning away from oil to gas to drive their economies. Our collective efforts to make gas a critical catalyst to our economic development should be a priority and approach should include the diversification of our economy, efficient management of revenues, commitment to local value addition in the gas industry. In the long run, a sustained decline in the price of oil may not be a bad thing for Nigeria as this may push us to diversify our economy using gas.